• The firm has noticed solid pick-up in the volume of dwellings sold in 2Q09 compared to 1Q09 and 4Q08. Dom pre-sold 215 housing units in the period and at the same time reported 59 resignations, of which 43 relate to the already flagged bulk cancellation in the Derby 17 project. The management stressed that it is not expecting any further bulk cancellations of previously signed agreements. This compared to 126 dwellings pre-sold in 1Q09 (106 net) and 105 pre-sold in 4Q08 (92 net). The management said the firm experienced a healthy volume of sales in July as well, which stands at average monthly sales number in 2Q09, despite the fact that the vacation period is usually weaker. CEO expects the growth trend to continue.
• In terms of the number of units handed over to clients, which under IFRS 18 drive the company’s top line, Dom managed to deliver 470 units in 2Q09 versus 398 in 1Q09 and 346 in 2Q08. The company confirmed that in full-year 2009 it targets the delivery of around 1,500 units to clients. It was also stressed that out of 630 units expected to be delivered to clients in the reminder of the recent year 622 have been already pre-sold by the end of 2Q09.
• The company’s management informed that the mix of the units expected to be delivered to clients in the third and fourth quarter of 2009 will be less favourable that in 2Q09 and 1Q09, with circa 75% of the overall number of units to be handed over coming from affordable segment, generating lower margin (compared to 59% in 2Q09). This in the end will affect the quarterly figures for the next two quarters.
• Dom currently has 969 housing units offered for sale, of which 222 have been completed, while the rest is under construction. The company has not started any new projects since July 2008, however the management stressed that it has four projects ready for an immediate start, in overall comprising 816 units, and the decision to commence should be made in September. Financing has been secured for these potential new projects.
• Dom maintained a high portion of cash and equivalents on its balance sheet, amounting to PLN 149m at the end of 2Q09, supported by two overdraft limits amounting to PLN 80m in overall. Debt due in one year amounts to a relatively low PLN 85m. The structure of Dom’s debt maturity in the years ahead is also relatively safe, with PLN 145m due by June 2010 and a PLN 45m due in mid 2011. By maintaining a strong balance sheet the company wants to be able to start new developments as soon as the market recovers.
• In March 2009, Dom’s transaction prices declined by an average 7.1% y/y in the affordable segment and 14.6% y/y in the higher-end segment.